Walton plans fresh $640m investment

[UKBengali]

I know this is a slightly dated article but this is potentially significant as the size of the investment is massive by BD standards.

If this goes according to plan it will create 15,000 well-paid jobs in Chattogram.

Walton plans fresh $640m investment

Walton Hi-Tech Industries Ltd is going to make a fresh investment of $640 million, equivalent to Tk 5,440 crore, to expand facilities to produce and increase export of electrical and electronic goods.

www.thedailystar.net

"Walton Hi-Tech Industries Ltd is going to make a fresh investment of $640 million, equivalent to Tk 5,440 crore, to expand facilities to produce and increase export of electrical and electronic goods.

The company has already submitted its plan to the Bangladesh Economic Zones Authority (Beza), seeking 300 acres of land at the Bangabandhu Sheikh Mujib Shilpa Nagar in Chattogram.

For all latest news, follow The Daily Star's Google News channel.
"Under the investment, the company intends to set up a second unit of Walton Hi-Tech Industries," said Walton Group Managing Director Golam Murshed.

"Our target is to complete the implementation work within two years and start commercial production."

The investment will be made over a period of eight years and would be comprised, in equal parts, of retained earnings and long-term bank loans. The group plans to borrow from domestic and foreign banks.


Murshed said once the Beza gives the approval, Walton would sit to plan out the number of products to be manufactured and make an announcement at the stock exchange.

Among them will be home appliances such as refrigerator, freezer, air-conditioner, compressor and television alongside cables and automobile components.


Murshed hopes to offer 15,000 jobs directly from the second unit.

Now Walton has an over 20,000-strong workforce in 22 production bases on 680 acres of factory area at Chandra, Gazipur. Its yearly production capacity is 10 million units.

When it comes to professional manufacturing of electrical and electronic goods, Walton has truly turned into a giant, gaining a reputation on providing competitive prices and ensuring a presence in more than 20 countries.

The Walton managing director hopes the second unit would widen its global footprint."

Walton set up its first manufacturing plant in 2008, and in 2016, it started manufacturing one vital component of refrigerators, compressors.

The proposal said all manufacturing machinery would be imported from countries, including Japan, China, Italy, Korea, Belgium, Turkey, Austria, Germany and the US.

Its forecast domestic and export sales revenue in the seventh year following investment is around Tk 5,690 crore.

With a paid-up capital of Tk 300 crore, Walton is already in the process of raising Tk 100 crore from the stock market this year through an initial public offering.

According to its annual report, its annual turnover in FY 2019-20 was Tk 4,100 crore. It was Tk 5,180 crore in the previous fiscal year.

Its earnings per share were Tk 21.34 in the July-December period in 2020, up from Tk 20.34 in the same period of 2019.

Beza Executive Chairman Paban Chowdhury appreciated the initiative, citing it would diversify the country's exports, which Walton had already contributed to, and that Bangladesh needed to promote such steps.

Walton's need for land will be examined, and the Beza will try to accommodate them at the industrial city despite a scarcity of land there at the moment, he said.

 

[Bilal9]

I know this is a slightly dated article but this is potentially significant as the size of the investment is massive by BD standards.

If this goes according to plan it will create 15,000 well-paid jobs in Chattogram.

Walton plans fresh $640m investment

Walton Hi-Tech Industries Ltd is going to make a fresh investment of $640 million, equivalent to Tk 5,440 crore, to expand facilities to produce and increase export of electrical and electronic goods.

www.thedailystar.net

"Walton Hi-Tech Industries Ltd is going to make a fresh investment of $640 million, equivalent to Tk 5,440 crore, to expand facilities to produce and increase export of electrical and electronic goods.

The company has already submitted its plan to the Bangladesh Economic Zones Authority (Beza), seeking 300 acres of land at the Bangabandhu Sheikh Mujib Shilpa Nagar in Chattogram.

For all latest news, follow The Daily Star's Google News channel.
"Under the investment, the company intends to set up a second unit of Walton Hi-Tech Industries," said Walton Group Managing Director Golam Murshed.

"Our target is to complete the implementation work within two years and start commercial production."

The investment will be made over a period of eight years and would be comprised, in equal parts, of retained earnings and long-term bank loans. The group plans to borrow from domestic and foreign banks.


Murshed said once the Beza gives the approval, Walton would sit to plan out the number of products to be manufactured and make an announcement at the stock exchange.

Among them will be home appliances such as refrigerator, freezer, air-conditioner, compressor and television alongside cables and automobile components.


Murshed hopes to offer 15,000 jobs directly from the second unit.

Now Walton has an over 20,000-strong workforce in 22 production bases on 680 acres of factory area at Chandra, Gazipur. Its yearly production capacity is 10 million units.

When it comes to professional manufacturing of electrical and electronic goods, Walton has truly turned into a giant, gaining a reputation on providing competitive prices and ensuring a presence in more than 20 countries.

The Walton managing director hopes the second unit would widen its global footprint."

Walton set up its first manufacturing plant in 2008, and in 2016, it started manufacturing one vital component of refrigerators, compressors.

The proposal said all manufacturing machinery would be imported from countries, including Japan, China, Italy, Korea, Belgium, Turkey, Austria, Germany and the US.

Its forecast domestic and export sales revenue in the seventh year following investment is around Tk 5,690 crore.

With a paid-up capital of Tk 300 crore, Walton is already in the process of raising Tk 100 crore from the stock market this year through an initial public offering.

According to its annual report, its annual turnover in FY 2019-20 was Tk 4,100 crore. It was Tk 5,180 crore in the previous fiscal year.

Its earnings per share were Tk 21.34 in the July-December period in 2020, up from Tk 20.34 in the same period of 2019.

Beza Executive Chairman Paban Chowdhury appreciated the initiative, citing it would diversify the country's exports, which Walton had already contributed to, and that Bangladesh needed to promote such steps.

Walton's need for land will be examined, and the Beza will try to accommodate them at the industrial city despite a scarcity of land there at the moment, he said.

Yeah these guys have a "kick a$$, take no names" policy when it comes to investments and boldly venturing into these export initiatives. The attitude is almost the same as Korean companies, when (25 years ago) Koreans started venturing into electronics, appliances and auto manufacturing.

 

[bluesky]

The proposal said all manufacturing machinery would be imported from countries, including Japan, China, Italy, Korea, Belgium, Turkey, Austria, Germany and the US.

@Bilal9, please note that BD still remains weak in producing mechanical goods and so WALTON will import its machines from many sources.

I hope, the country soon starts producing small mechanical components. This is a very vital sector - to design and manufacture mechanical goods. Their production propels the country towards fast industrial development.

No industrial development means a hollow economic development.

 

[Paul2]

$640m is a huge overkill for an electronics factory.

A passing birdie told me they want a car factory there.

 

[Bilal9]

$640m is a huge overkill for an electronics factory.

A passing birdie told me they want a car factory there.

That is also the plan, as I understand it. Not cars at first maybe, but of course two wheelers and any inputs needed such as engine assembly.

The cost also includes backward integration, such as setting up precision Sheetmetal processing for making TV frames and refrigerators bodies/frames, as well as other inputs needed for their final products.

 

[SpaceMan18]

@Bilal9, please note that BD still remains weak in producing mechanical goods and so WALTON will import its machines from many sources.

I hope, the country soon starts producing small mechanical components. This is a very vital sector - to design and manufacture mechanical goods. Their production propels the country towards fast industrial development.

No industrial development means a hollow economic development.

I agree I guess , here's an analogy

BD is making a cake to sell it to others , except it buys it's ingredients from others which doesn't help with profits. So what BD needs to do is to find a way to make these ingredients for ex like instead of buying eggs it needs to get chickens and instead of buying sugar it needs to get sugarcanes etc.

But yes BD needs to make these small mechanical components for itself

That is also the plan, as I understand it. Not cars at first maybe, but of course two wheelers and any inputs needed such as engine assembly.

The cost also includes backward integration, such as setting up precision Sheetmetal processing for making TV frames and refrigerators bodies/frames, as well as other inputs needed for their final products.

Well we gotta transition to making cars eventually , we need experience especially with EVs

 

[_NOBODY_]

Holysh*t! Congrats my Bengali friends.

 

[bluesky]

BD is making a cake to sell it to others , except it buys it's ingredients from others which doesn't help with profits. So what BD needs to do is to find a way to make these ingredients for ex like instead of buying eggs it needs to get chickens and instead of buying sugar it needs to get sugarcanes etc.

But yes BD needs to make these small mechanical components for itself

Yes, you are right. But note also that producing mechanical components needs high-quality mechanical engineers. Developed countries are developed today not because they have built many high-rise buildings but because they are able to produce Capital Goods we call machines.

Millions of laborers are also needed to work in the factories and workshops. So, employment rises fast and the country gets richer year after year. However, the big companies like WALTON and steel mills shall have to come forward and create a system whereby many of the simpler components are produced domestically by their subsidiary companies.

 

[UKBengali]

@da

Yes, you are right. But note also that producing mechanical components needs high-quality mechanical engineers. Developed countries are developed today not because they have built many high-rise buildings but because they are able to produce Capital Goods we call machines.

Millions of laborers are also needed to work in the factories and workshops. So, employment rises fast and the country gets richer year after year. However, the big companies like WALTON and steel mills shall have to come forward and create a system whereby many of the simpler components are produced domestically by their subsidiary companies.

You make good points but I think we need to be a little patient as companies like Walton cannot do it all at the same time.

I would guess that they are already thinking along these lines and once their revenues are higher then they can start making the investments to start producing the machines they need to make their products.

After all, every private company wants to have as much control over its supply lines and keep their input costs as low as possible.

If you look at the history of companies like Walton you will see how they are gradually making more and more of the components that they need inhouse. A good example is they no longer import any displays for their TVs as that is manufactured in-house, admittedly using imported machines. The next logical step would be to start making the machines to produce these displays but this needs a lot of money and expertise which they currently do not have.

 

[SpaceMan18]

@da




You make good points but I think we need to be a little patient as companies like Walton cannot do it all at the same time.

I would guess that they are already thinking along these lines and once their revenues are higher then they can start making the investments to start producing the machines they need to make their products.

After all, every private company wants to have as much control over its supply lines and keep their input costs as low as possible.

If you look at the history of companies like Walton you will see how they are gradually making more and more of the components that they need inhouse. A good example is they no longer import any displays for their TVs as that is manufactured in-house, admittedly using imported machines. The next logical step would be to start making the machines to produce these displays but this needs a lot of money and expertise which they currently do not have.

They need better funding for R&D and skilled people , our education system sucks and needs to be improved

 

[Destranator]

They need better funding for R&D and skilled people , our education system sucks and needs to be improved

This is why I say start a nationwide program in collaboration with the West, Japan, Korea, etc. to set up at least one international standard technical trades and language training institution in every upazilla by 2030.

To be able to become a high income, developed nation, we need several million skilled tradesmen (with internationally certified education obtained locally) who can speak at least basic English to be able to:

• help set up and support high tech industries (will reduce import dependency and allow exporting hundreds of billions of dollars worth of products). When investors would see a highly skilled workforce being available in BD, they will invest in droves
• Take up high skill occupations overseas and send back hundreds of billions of dollars in remittance
• support engineers and scientists with R&D in various industries.

This intiative would cost a few billion dollars but partial funding can be obtained from overseas. The government will earn hundreds of billions of dollars worth in revenue as return for the investment.

We have dug our own grave by overpopulating ourselves. The above is the only way out.

 

[SpaceMan18]

This is why I say start a nationwide program in collaboration with the West, Japan, Korea, etc. to set up at least one international standard technical trades and language training institution in every upazilla by 2030.

To be able to become a high income, developed nation, we need several million skilled tradesmen (with internationally certified education obtained locally) who can speak at least basic English to be able to:

• help set up and support high tech industries (will reduce import dependency and allow exporting hundreds of billions of dollars worth of products). When investors would see a highly skilled workforce being available in BD, they will invest in droves
• Take up high skill occupations overseas and send back hundreds of billions of dollars in remittance
• support engineers and scientists with R&D in various industries.

This intiative would cost a few billion dollars but partial funding can be obtained from overseas. The government will earn hundreds of billions of dollars worth in revenue as return for the investment.

We have dug our own grave by overpopulating ourselves. The above is the only way out.

I agree , education is the way I guess